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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

AUD struggling to maintain recent gains

Published August 29, 2018

Author: Dennis Li

With a potential trilateral trade deal possibly being reached this week after a Canadian trade negotiator joined her Mexican and US counterparts in Washington, we saw the Aussie hold above 0.7300 after testing the 0.7350 resistance level against the USD overnight. The AUD is down against the other majors due to a weaker USD and a subsequent rally in those currencies.

  • US consumer confidence spiked to a near 18-year high in August with households remaining upbeat on the labour market and strong consumer spending that should help sustain the economy for the rest of the year.
  • The US goods trade deficit widened sharply in July as exports of agricultural products dropped amid the intensifying global trade tensions which suggests a slowdown of US economic growth in Q3.
  • With further escalation of tariff tensions, the Chinese yuan firmed against the USD for the third day in a row after China’s central bank applied a ‘Countercyclical Factor’ artificially supporting  the currency.
  • Rating agency Moody’s downgraded 20 of Turkey’s financial institutions expressing concerns about the increased risk of a deterioration in funding.